A month has gone by since the last earnings report for Teledyne Technologies (TDY). Shares have added about 7.2% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Teledyne due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Teledyne Technologies Incorporated before we dive into how investors and analysts have reacted as of late.
Teledyne's Q4 Earnings & Revenues Beat Estimates, Increase Y/Y
Teledyne Technologies reported fourth-quarter 2025 adjusted earnings of $6.30 per share, which surpassed the Zacks Consensus Estimate of $5.83 by 8.1%. The bottom line also improved 14.1% from $5.52 recorded in the year-ago quarter.
Including one-time items, the company recorded GAAP earnings of $5.84 per share, up 39% from the prior-year period’s earnings of $4.20 per share.
TDY reported 2025 adjusted earnings of $21.99 per share, which surpassed the Zacks Consensus Estimate of $21.52 by 2.2%. The full-year earnings were also higher than the year-ago figure of $19.73 per share.
Operational Highlights of TDY
Total sales were $1.61 billion, which beat the Zacks Consensus Estimate of $1.57 billion by 2.7%. The top line also surged 7.3% from $1.50 billion reported in the year-ago quarter. This improvement can be attributed to higher year-over-year sales recorded in the majority of its business segments.
The company reported sales of $6.12 billion during 2025, which surpassed the consensus estimate of $6.07 billion. The full-year sales were also higher than the reported figure of $5.67 billion in 2024.
TDY’s Segmental Performance
Instrumentation: Sales in this segment increased 3.7% year over year to $382.6 million, driven by higher sales of environmental instrumentation, primarily driven by increased sales of gas detection products.
The adjusted operating income rose 6.4% year over year to $107.3 million.
Digital Imaging: Quarterly sales in this division increased 3.4% year over year to $850.5 million. The jump was due to higher sales of commercial infrared imaging components and subsystems, as well as unmanned air systems.
The adjusted operating income rose 79.4% year over year to $162.9 million.
Aerospace and Defense Electronics: Sales in this segment totaled $275.9 million, up 40.4% from the prior-year quarter. The improvement was driven by higher sales of defense electronics.
The adjusted operating income increased 23% year over year to $69.4 million.
Engineered Systems: Revenues in this division fell 9.9% year over year to $103.3 million due to lower sales of engineered products and energy systems.
This segment's operating income rose 17.3% to $11.5 million.
Financial Condition of TDY
Teledyne’s cash and cash equivalents totaled $352.4 million as of Dec. 28, 2025, compared with $649.8 million as of Dec. 29, 2024.
Its long-term debt was $2.03 billion at the end of the fourth quarter of 2025 compared with $2.65 billion as of Dec. 29, 2024.
Cash flow from operating activities totaled $379 million for the fourth quarter compared with $332.4 million in the prior-year period.
TDY generated free cash flow of $339.2 million in the fourth quarter of 2025, up from $303.4 million in the prior-year quarter.
TDY’s Guidance
Teledyne expects to generate adjusted earnings in the band of $5.40-$5.50 per share for the first quarter of 2026. The Zacks Consensus Estimate for TDY’s first-quarter earnings is pegged at $5.54 per share, higher than the company's guided range.
For 2026, Teledyne expects its adjusted earnings to be in the range of $23.45-$23.85 per share. The Zacks Consensus Estimate for earnings is pegged at $23.85 per share, which lies on the upper end of the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Teledyne has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, Teledyne has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Teledyne Technologies Incorporated (TDY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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